President Trump swore in Kevin Warsh on Friday as the Fed’s 17th Chair, succeeding Jerome Powell. During the ceremony, Trump emphasized that Warsh should act independently and not be subject to pressure from any outside influence.
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“I want Kevin to be totally independent. I want him to be independent and just do a great job. Don’t look at me. Don’t look at anybody. Just do your own thing and do a great job,” Trump said.
Higher Yields Shift Expectations Toward Rate Hikes
Warsh is set to inherit the Fed during a volatile period, with soaring oil and gas prices keeping inflation elevated. In addition, long-term yields have surged in recent weeks, casting doubt on rate cuts. That could complicate the policy outlook, given Trump’s repeated calls for lower rates under Powell.
Higher energy prices have led investors to completely price out a rate cut this year, with expectations shifting to a rate hike, according to the CME FedWatch tool.